haven't been able to get any momentum behind the lift. see if it happens finally breaking out. range. >> fed governor dan turullo. that should be interesting. >> that does it for "closing bell." thank you guys for joining us this afternoon. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders are tim seymour, brian kell and dan nathan and guy adami. twitter sinking at rumors circle its annual board meeting, but if you're hoping for a takeout one analyst says don't hold your breath. he's here to explain why and anal getting hit after its big iphone 7 launch and suddenly the company is about to get really quiet. why it has investors so worried and later a top technician has found three stocks that look like they are about to break out, and they all have fat dividends. we'll give you the names. first, we start off with a retail wreck. consumers stock getting hit across the board. macy's falling with the rest of the department stores and didn't

stop there. shares of costco under pressure taking target and walmart along with it and another bad day for the grocer. super value falling 9% after it slashed its full-year outlook following guidance cut yesterday. what the are these stocks telling us about the consumer? brian kell? >> well, listen, this started back -- back in december of last year when we had automation. mike jackson was on cnbc talking about the fact that auto sales were falling. that's a leading indicator. that's happened over the first six months and now you're starting to see it into retail. you're starting to see it in macy's and all of that. maybe it's for rising oil prices, maybe not. for me to the big macro picture last friday with the jobs report one thing that wasn't so great about that. that was average hourly hours worked per week. that's been dropping. it's dropped about 1%. that means people have 1% less money in their pocket on average. >> hold hon. >> the last time that we saw that was right before the 2008 recession. >> well, you know, the argument about energy prices and oil prices is -- doesn't make any sense because it didn't work on

the way down. >> sure it did. >> worked how? >> it cushioned the blow. cushioned the blow. >> we would have been worse. >> what we complained for 12 months that the consumer was not showing any appreciable difference in their spending power. >> maybe they were. >> say this on the show over and over again. to actually now complain higher prices -- >> i'm not complaining it's higher -- i'm not saying it's the reverse effect. what i'm saying is at the same time that average hourly workweeks have been falling year over year, you've also had a falling oil price, right, so it cushioned the blow. now we're seeing a rising oil price and people have less money in their pocket. >> i would argue we've seen a pretty decent wage gain market over the last two job numbers. i think we need to relax for a second. again, if it was a month ago we were going crazy about the big move in the retailers. we saw 30% to 40% moves in all of these guys. best buy traded from, you know, a high 20s handle up to two-year highs overnight effectively. so what's happening is the reality is the consumer is not

in great shakes, but a lot of these stocks went from being on the verge of mortality because of the internet, because of structural issues and because of i think, you know, what we're generally seeing in terms of lower ticket sizes and price competition, but the reality is the consumers are pulling back because these stocks got ahead of themselves. they were oversold and had a huge rally off the lows and they are pulling back a little bit. >> got to take issue. you brought up best buy, and this is a company that hasn't grown sales in five years, you know what i mean, so that's not a great comparison. you're talking about stocks that were very beaten up with massive structural issues, same with the department stores. >> didn't best buy -- my point is best buy didn't deserve to rally to do what it did so the fact that it's pulling back a little bit here isn't indicative of anything other than it's trading back to fair value. >> let's talk about the 10% decline in costco. don't you think that's indicative of something like that? the stock broke out into all-time highs a few months ago and matched highs and now since given that back. since they missed their august sales numbers. to me there's obviously noise as

far as oil, you know. that's definitely an issue with costco there, so to me i think there's a lot -- i think it's a microcosm of what's going on in a big, big way when you talk about food deflation. ed into is a big issue and now this stock -- >> and it's crushing everybody again because they have to. >> you really think snow. >> >> are they really -- walmart, sales have declined for a year on. >> dan, i'm not singing walmart's praises. i'm telling you if you're costco or you're walmart or you're kroger's or you're one of these big box places or one of the hyper markets you're seeing incredible price competition and you're seeing deflationary forces. >> not good for the stocks or the margins. >> we're talking about the consumer like the consumer is dead and there's a big systemic problem. that's not what's going on. >> i think there could be. there's signs of it. >> you're not saying that. >> i'm not saying that. >> what's guy saying? what's guy adami saying. >> hi. >>ly. >> one word we haven't used so far is amazon. the amazon effect. >> new high today?

>> right. as long as amazon keeps going higher i don't think you can say the consumer is dead and burr r buri buried. i hear what b.k. is saying, never underestimate the u.s. consumers's ability or want to spend. all made that mistake over the years. talk about the consumer and department stores. that's a broad swath to talk about. >> true. >> but a name like kroger's, for example, i maine, that's a stock that was ballistic until the middle of last year, and so now it's just pulling back off an all-time high. valuation isn't ridiculous. i heard what supervalue said. kroger reports tomorrow. how you trade kroger's. you hope they miss or say something along the lines of super value did and buy it on the dip off of valuation and i think it's pretty reasonable. names like whole food markets, valuation got too high. a product of their own success. valuations got untenable. >> right. >> and those stocks sold off. margin compression has killed many of these places as well. who does that win towards?

amazon again, so, again, to talk about the health of the consumer off of that backdrop, i don't know if we're doing it justice >> you mentioned amazon a new high and visa a new high. there are transactions being made by the u.s. consumer, brian kelly. >> where? >> well, obviously, they are buying stuff. >> home improvement. >> look, take a look at home depot stocks. >> whatever mike jackson, ultimately you're at a place where auto sales are at a historic place. >> flat lined all year. you tell me, take a look at auto nation stock. >> i don't track that should. >> you should. it's a leading indicator. >> a better debate rather than placing a bet on whether the u.s. consumer is dead or not going back to the amazon thing. amazon is a company growing sales, expected to grow sales this year 28%. all the other big box guys, lucky to get low single-digits growth. what's going on here is the consumer is still spending. just wising up. going to amazon and buying a $1 is hundred prime membership and buying everything as cheaply as possible delivered to their door. doesn't mean they are falling

apart or spending more. >> are you a buyer of amazon? >> no. >> but the point is when you talk about consumer credit, you talk about visa at all-time highs, these are the secular sort of things that you as an investor should be thinking about. that's why paypal, interesting things to me because people are spending more online. >> and you are long paypal? >> yeah. >> bullishly positioned in paypal. >> what i will say is amazon is a leading indicator of the sentiment around retail. if you see amazon have a problem with sales, then we really -- that's the signal that everything has a problem. >> would you short the consumer, some retailer, consumer space? >> as tim mentioned they have already gotten crushed, right. i don't think it's a great risk/reward at this point. at some point you'll want to look at shorting amazon but not today. >> can i ask you a question. can you be so dauer on the outlook for the consumer and be long financials? >> yes, because of oil. the higher oil goes the more likely that the fed is going to raise rates.

therefore, people are going to think that rates are going high. it's a shorter term trade. >> didn't you say higher oil prices are a drag on the consumer? that's a drag on the economy? >> i totally agree with that. i'm talking about had a short-term trade. >> i don't think the fed has a lot of room. >> but as oil -- i'm talking about a short-term trade. let's call it 30, 60, 90 days. as the oil price goes up people are going to say oh, my goodness the fed has to raise rates. that's going to be good for financials. very short-term trade. just like buying the consumer -- >> i get the fact that people think fed hiking is good for financials but you don't need that for the rally. >> look at what ecb did today and how european banks acted. they were not as dovish as people expected and look what happened. european banks were up a lot, even when the general of the ss-5e was down. >> european banks have been arguably given a lifeline by the re ecb. >> i want to get back to the consumer. what are you buying?

what would you buy? >> i think the consumer play is also in airline at this point effectively and listening to the airline company these companies are actually run better than people thought. gotten data from a big conference last year where unit growth year over year is better. stay long airlines. >> the way to play the consumer now for years has been mastercard and visa hand nothing that's happened over the last couple of weeks leads me to believe otherwise. >> an earnings alert on a retailer that's actually soaring in the after-hours session. let's get to seema mody in the newsroom. >> reporter: restoration hardware moving sharply high. earnings blew past expectations at the high-end retailer shipped products earlier than anticipated. the company said that resulted in a pull forward of revenue and earnings into the second quarter from the third quarter. ceo gary freedman says this nal we'll begin to unveil some of the most significant initiatives in the history of our company that we believe will create an infliction point in our business beginning in the fourth quarter. but in its outlook the company

says fiscal 2016 results will be impacted by certain short-term operational items including costs associated with rh modern production delays and investment shares though up by 8% after hours and still down about 50% this year. melissa? >> all right. thanks so much. seema mody. >> remember way back, when beginning of the year, restoration hardware came out and said people were delate purchase of the big-ticket items like sofas because wall street was weak, and we sort of mocked, it and then it came out that really consumers were a little bit cautious, so is this actually a good sign that they are coming out? >> i think restoration hardware's problems are restoration hardware's problems, and i think the stock is out the way they runt company. gross margins down. the comps on this stock are very easy for the second half of the year. i think you stay in this name. don't have to buy it tomorrow. this stock is going higher. >> look what they are saying. they ship stuff early and revenue that people were expecting to happen in the future just got pulled into this quarter. they are not saying that sales are up, that all of a sudden they had just a huge influx of

orders. they just ship stuff early, so i think it's, you know, wouldn't be buying it up 8%. i'd be cautious. >> june is when they had the crater move down to 28.5, 29 and this is not revisionist history but i remember being on the desk and i talked about here's a stock that traded back to levels that it last saw a year prior. valuation, even with the guide down was reasonable, as it is now, by the way, and you're talking about a company that's a short interest, probably approaching 40%, so what b.k. just said is spot on, but can the stock continue to go higher from here? yes, i think the stock can come higher. coming up, apple says it will not give weekend sales figures to the iannone 7. why the should change of heart and should investors be worried and we're going yield hunting with three stocks that yielded over 3.5% that one technician says about to break out. we'll give you the names and twitter, are jack do,,y's days numbers? top analyst bob peck, the bob

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welcome back to "fast money." apple shares getting hit today kicking off the top trade.

stock down nearly 3% after yesterday's big iphone event and the company getting quiet saying it won't release the sales numbers following the weekend after the launch reducing visibility for the street. dan? >> it's interesting. they issued a statement i think to cnbc this morning basically saying that that number is not a great reflection of basically, you know, their ability to supply the phones anymore and i get that. this is a much more complicated launch than the first five or six when they were doing if in a couple of developed markets. here's the issue that i take, that this happens within a day of the most sainct morresst san two-hour event, massively overproduced, not particularly exciting whatsoever and to me the story has lost its luster, people, and i know that there's a lot of -- everybody are fan boys of the story and love their phones and love the computer and whatever. it's just not that exciting of a story. the hype has to die down a little bit. this may help it. once you get over it and they are less transparent in some

ways it may be a better thing that we get back to the quarterly releases. >> a lot of retailers moved away from monthly same-store sales. >> when you think about what's going on with this story, this stock, a lot of enthusiasm built up into this holiday quarter, and i don't think they will live up to it. you'll see a stock back in the mid-90s very soon. >> where was there an expectation of anything more than what we got here? >> tim, the fact that expectations were so low. >> touched down 20% off the lows. >> and in a downtrend. it was as good as it gets on the news flow for these guys. they will have mac announcements. not particularly exciting when you think about it. >> there's a law of large numbers on their install base and refresh cycle and places like india that absolutely have to buy these. maybe they will buy the -- >> two calls ago tim cook said india is apple where china was six or seven years ago. you want to wait for that? >> i don't know. look at where penetration is, india will go a lot faster than china.

tim cook probably knows better than i do. >> the current asp, you know what the average household income, about 25%? >> i know what per capita income is in india. apple down 22 times at nine times "x" cash is something you have to run from. >> i'm not saying you have to run from it. >> time-out. hold on! hold on. >> everything you've just said has been in the price for three months. >> guy adami, wells fargo comes out today, downgrades apple. one point interested me is they say that the high-end user right now who has a 128 gigabyte model less likely to upgrade to the new phone and more likely to wait. >> diminishing marginal returns. it seems as though each launch is getting less and less exciting. the stock action yesterday i thought was pretty good and i was surprised at the way it traded lower today. how do you trade the stock though is how you come around to it. >> yes. it's been in this massive downtrend since the middle of 2015, that it broke out of last

quarter when they reported. to me as long as it holds $104 which is basically back to that trend line that it broke out from, i think the stock is okay to the upside. >> twitter shares sinking as the company holds its annual board meeting and you might not recognize him without the red phone but sun trust's bob peck lays out what they see for twitter's future and it ain't prettyry. i'm melissa lee. you're watching cnbc, first in business worldwide. meantime, heer what else is coming up on "fast." >> be very, very quiet. i'm hunting -- >> for yield. three stocks with big dividends that the charts say are about to break out. we'll give you the names. plus -- >> money, will always be paper, but gold will always be gold. >> and gold is having its best year since 2010, and one gold watcher says it's about to get even better. they will tell us why when "fast money" returns. ♪

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welcome back to "fast money." as rumors swirl around the future of twitter the company's board is meeting in san francisco. more on this developing story. >> reporter: hi there, melissa. that's right, and all of this uncertainty isn't doing much for the company's stock. take a look. the shares ended the day down nearly 6%, and for the year the stock down more than 30%. as for today's meeting, sources tell cnbc that cost cuts are on the agenda. management is exploring ways to save money since revenue is tight. those options include possible layoffs or selling off assets like ad tech company mopub or video sharing company vine. jack dorsey's management will not be questioned at the meeting and he'll have a few more quarters to execute his turnaround plan which lies

around live video. and possible speculation of a sale of the company and no deals on the table. possible buyers include google parent alphabet, microsoft, amazon and salesnorse, and for now twitter is focusing on its partnership with the nfl starting to live stream games starting a week from today and hoping that will help boost user growth. the company declined to comment on the board meeting. back to you guys. >> all right. aditi, thank you. aditi in san francisco. with a litany of issues as a public company, would twitter be better off going private? could a major move be made in 2016? who will win the super bowl? we have so many questions. bob peck of sun trust might know some of these answers. bob? >> yeah. >> i'll leave the super bowl question for last. >> okay. >> what do you think will come of the board meeting? >> i think you're right. it's about cost cuts, and one of the notes we did for clients if they cut employees anywhere from 15% to 30%, what effect on ebitda, and if put a 15 times multiple on that or so you get a

$21 stock target up from 19 today. however, the problem there is so much ebitda is adjusted for that at a $17 target. even though they cut costs, we don't see much upside from here. >> how about the sale question? >> so on the sale, it's a big question. we do not think anything is going to happen in 2016. we think that jack just got here a year ago in september. they have a bunch of changes. quite honestly this quarter, in the fourth quarter, nfl, live video, integration with double click, morepayer scopes and vines and the real question that doesn't inflict the users and so far our data shows august was down from july which was important and had olympics and it was still down. not a good sign and if it doesn't inflict then i think in 2017 a sale would be inevitable. >> let me ask you this. a lot of twitter's problems, they are exposed because they are a publicly traded company and have to report earnings. had it stayed private. >> yeah. >> do you think its valuation would actually be higher today? >> it's a great question. almost make the question did they go public too late? a lot of the growth they had with a chance to show in the markets and therefore to be able

to innovate and invest more in the public markets. right now if they aren't able to turn it around, we don't think there's a change in management. we think a strategic bid is most likely and in our notes we go through the most likely buyers and we show them on the tv there. alphabet, apple and some of the software guys. >> they haven't come forward so far. does twitter need a for sale shingle on its front door? >> i think so. jack has the support of the board and if there is an acquisition the biggest question is at what price? if you're trading 15 times ebitda or more than 20 times ebit it's expenseive. >> yeah. let me ask you this, bob. you saw the $26 billion bid for linkedin, a company on a gap basis massively unprofitable for a lot of the same reasons twitter is and got a huge premium on a scarcity value, right? >> yeah. >> what would you assign if you're taking a conservative view, 17, 18 bucks on valuation?

>> yeah. >> what would you assign scarcity property for this value. >> >> since the linkedin acquisition, some of the other stocks rumored to be taken out up 27%. the initial bid from microsoft is 17 times ebitda and today you trade around 15. not a huge upside. final takeout multiple of 21 times, you need to adjust the stock-based compensation to put you in the low 20s. not much upside from where you are today. >> where do you think twitter will be in a year? >> good question. if they can inflict in the fourth quarter and so far the data is not showing they are table. >> bob, good to see you. >> of sun trust. >> where do you stand on twitter? >> long stock, and i -- you know, i feel somewhat neutral at this point but i feel it's a company that's high on intrinsic value with very little to show hon how they will monetize it. you feel like the second derivative twit which is how do they create the environment where you can figure out how to monetize second derivative viewing of live stuff. that's something interesting and i think a media company could do a lot with that and clearly at

least stuff that the existing board has been unable to do. i stay long the stock. i don't think that there's a massive m & a premium that should be in the stock. >> b.k.? >> it's wilting on the vine, that's what it is. a great property and great product, we all use it and has massive potential and wilting on the vine. haven't innovated in forever. maybe the video thing takes off. but seems like if i'm a buyer, doesn't seem like either they want to sell or there's something going on there. if i'm a buyer i wait for it to come to me. >> wilting on the vine, but just needs to be watered like many things that are wilting on the vine. throw a little water on it. >> sometimes it's too late though to water and the plant is dead. >> like ferns, for example, come right back to life. >> is twitter fern? >> i think it might be a fern. fern was also the girl in "charlotte's web. request the ". >> ferns are flimsy plants though. >> you're saying it could be revived. >> lbo won't happen here for a lot of different reasons could. this make sense for a private equity deal? i don't know. i think there's more goods than bads in twitter despite the fact

that it's down 10% in the last month, i think the stock has room to the upside. >> yes or no to twitter? >> yes, but a little lower, an i'm going to give you guy a little free "options action." sell puts and buy yourself some time. >> like christmas game early. still ahead, we're going hunting for yield here. three dividend-paying stocks that could be set for had a major breakout right after the break. plus, gold on track for its best year since 2010 and one gold watcher says it has even more room to run. why he's so bullish this hour. much more "fast money" still ahead.

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welcome back to "fast mon " money." stalks saw red across the board. dow and s&p fell a quarter percent while the daze knack closed down by half a percent. energy the big winner, becoming the best performing sector in 2016 after crude saw its best day since april. here's what's coming up. drug verseus politics. why one health care ceo is calling out democratic

presidential nominee hillary clinton and gold tracking for its best year since 2010 and one strategist says there's even gains to be had. first, bonds selling off hard and global bond yields remain near record lows which has had a number of stocks yielding more than the ten-year. good news for those hunting for income. breaking it all down is a man himself always on the hunt, our own dominic chu. hi, dom. >> well, melissa, speaking of hunts, do you remember a time, a time when the s&p 500 and every sector in it had a dividend yield that was less than the ten-year treasury? it wasn't all that long ago but seems like a lifetime. around the tail end of 2007 and beginning of the 2008 before the depths of the financial crisis and fast forward today and the story is a whole lot different with. a ten-year note yield around that 1.58 to 1.6 range area, eight of the ten current s&p 500 sectors pays more in terms of dividend yield.

tech yields the least at around 1.35%. meanwhile, the consumer discretionary sector is just about a hair below. we'll say maybe in line with current ten-year yields, but the other eight, they are all above. telecom and utilities have the biggest dividend yield spread over ten-year treasuries themselves. now, this kind of situation has led to all kinds of speculation about a surge in demand for income-producing stocks. as investors really kind of rush to find yield, but so far we haven't really seen a flood of money come into the market to invest. valuations are arguably rich for many parts of the market overall so, melissa, is this really a market where there is no alternative to dividend-paying stocks, the so-called tina trade or the tina market. financial advisers all over are likely getting lots of questions from their clients to that effect. back over to you guys, melissa. >> thanks, dom. >> you're welcome, melissa. >> all right. let's trade this. is this armageddon. >> i don't know if it's

armageddon. accurately describes what's going on, right, and the world is upside down. people are buying stocks for the dividend yield to get yield, and you're buying bonds for capital appreciation. not generally how it's supposed to work but explains everything that's going on. yeah, can you buy them and get your yield. just understand that you're not buying a bond. >> guy? >> moving the bond market today actually startled me because it looked like it finally reversed. tlt traded great yesterday and traded horribly today and now you have ten-year yields back above the 160 level that's somewhat concerning for me. i'm still a bond bull, i want to say that again. through 165 up towards 170 at ten years you've got to totally re-evaluate everything and all the trades that work so well, telecoms and utilities. they don't work nearly as well in that environment. >> seen a little bit of unwinding in those particular areas. where would you go for yield? >> i would go to utilities, first of all. >> you would? >> and mlps and things that actually have proven to be outperforming over a long period of time.

you don't own them for a week but for an extended period of time. i think people also forget that whether it's an attila or philip morris or, you know, some -- or an at&t, these stocks have been outperforming for three years. this didn't just happen six months ago when we took the brexit leg lower, so i think you have to pick your stocks. some. stocks are very expensive. the staple stocks whether it's general members or kellogg's or clog yoks stay clear of. >> stocks yielding better than bonds and what are high dividend paying stocks? chris, which stocks are you looking at? >> well, i want to talk about three names not from your traditional yield groups. these three names all sport healthy yields and have largely been out of favor the last three years. the first in energy, obviously a very good group. occi, osy, a 40% market and started to base over the last several months.

48 3507b9 is the level here. we think this breaks out and gets to 58 as our target, and the best part, you're paying nearly 4% just to own it. let's go to -- we lost our shot there, but let's go to las vegas sands, consumer discretionary, lvs. another name that yields 5%. 60 bear market. that is over. this has turned and is ready to go up. big base over the last 18 months. 53 is good support. we think on its way to 65, and then lastly, when we look at metlife, this one isn't quite there yet, but we think it's getting close. up here through 45. we think high 50s is ultimately the target here, and, again, 3.7% yield and this one does better when yields gun as well, so three names, long out of favor that we think are getting better here. >> do you guys have any questions for chris? >> not at all. >> send it out to times square. >> scary out there. >> may not have any questions for him.

>> chris, why don't you come on over. >> bring him a chair, if you will. >> got a question or two. >> hey, buddy. >> good to see you, man. >> who wants a question of chris. >> >> me, please. >> go, b.k. >> i'm looking at these, chris and i see the break-up. what concerns me, particularly like an occi, not seeing the commensurate volume increase, right, at least when you look at a weekly basis. volume is not much greater than the average. does that worry you? >> the problem that i have is volume has not been a good indicator for seven years so i'm not sure we want to necessarily abandon the thesis because the flow isn't there. we can say that about a lot of stocks over the last seven years. really hasn't mattered. i would note today volume was above average in occi and looking at the up days you've had decent volume skews as well. i recognize it hasn't been there to the extent maybe that we would like to see but i don't think it's a big deal at this point. >> occi, $105 a couple years ago and got cut 40% and down to 58 or so and the move over the last

month or so, call it the last three months or so, has been pretty staggering to the upside. my concern is that too much too fast because valuation is ridiculous. i know crude has rall eerksd but, you know, talking about a company that's probably trading closer to 58 times forward earnings and understanding the leverage that it has. where do you get concerned if you're wrong? in my opinion if it breaks 75 which is pretty tight from here. >> let's think about it this way. majority of the gain that occi saw was off the february lows. really gone nowhere since mid-april. consolidating the move. we've seen eog break out and pxt break out. occi is the next to go. 78.50 is the next big level and goes to 58 if we can get through that. >> thanks, chris. dan nathan, where would you go for yield, occi, vegas sands, metlife? >> met. listen, i think there's some things going on with rates if it were to materialize over the next three, six months. you'll see a breakout of that downtrend, and it's probably a reasonably priced stock and has

a fat yield and that looks technically pretty decent. >> tim? >> i love occi. production growth, they have been growing their value, 4% to 6% production growth is better. increased the dividend at a time when a lot of other companies you would be concerned. i would not run from the stock, make it overweight. >> despite asking chris the question, not asking for a friend but asking for me on occi because i'm long xop. oil goes higher so would i stick with occ sgli when you were at college in harvard, did you play a game named stratego? >> i say strategis. >> i'm not commenting on your pronunciation of his firm. i'm asking -- >> are you going -- where is this going? >> just talked about it. i happened to agree. if occi holds 75, does feel like it has room to the upside. i mentioned 75 as a critical level, so i guess i'm in the same camp as one brian kelly and tim seymour. >> you asked me -- >> folks out there should buy

that game. >> you sunk my battleship. >> that's a different game. >> that's a different game. >> anyway. >> nerds. >> still ahead, gold is tracking for its best year since 2010. one gold bull says it's heading even higher. he'll tell us what has him so excited and allergen ceo brent saunders is sounding the alarm on drug pricing and how he plans to keep prices low and stay above the competition. more "fast money" right after this. the launch window.

welcome back to "fast money." time for a little stock therapy. our very own meg tirrel sat down with brent saunders of allergen and joins us now from boston. hey, meg. >> reporter: covered a lot of topics and had to start with this pledge that brent saunders put out earlier this week not to take what he calls egregious price increases that he says we've seen across the drug industry. we asked him, of course, about hillary clinton's plan that came out on friday. he said, well, it's a populist issue and a good campaign promise. this isn't something government can solved. we asked him. pledging to take only less than 10% price increases no more than once per year in his products. should your peers take this pledge as well? here's what he said. >> i think everybody should -- should take a look in the mirror and examine the practices that

they are taking in this arena and say does it hold up to the social contract we have with patients? those companies all invest in r & d and we applaud that. looking for cure and treatment on the medical needs. we applaud that, but are they taking price increases solely to drive their business to make up for shortfalls in other areas, or are they doing it because they can justify it by looking in the mirror, understanding the value. medicine that they are bringing to the market and can with transparency explain the need for that price increase? >> reporter: now, of course, we also had to ask by m & a as they have got this $40 billion cash pile from selling their generics business to teva. kelly evans asked actually would they be interested in potentially buying valeant. saunders chuckled in his response saying no, i don't think that would be a fit but also eran rated on what they are looking for. listen to in. >> we're not looking at doing transformational m & a. we've built our company and we're looking for stepping stone

deals where we can add to the sure patriotic presence. >> reporter: when he says not doing transformational m & a, we say would that rule out a biogen that's been on the table and he indicated that's probably not where they are looking and asked about bausch & lomb and he said that doesn't look like a fit. >> what's sorts of therapies is he talking about, meg in, terms. acquisitions that he's looking for? >> reporter: well, he cited one they announced earlier this week, a very small deal, upfront payments of just $60 million for gene therapy in eye care this. would signal a shift in direction for allergen, getting into the hot, more speculative innovative biotech space so whether we'll see more of those will be very interesting. >> meg tirrell, second big interview, meg joining from us boston with the allergen ceo so this is interesting because we

know not only allergen has huge piles of cash but a lot of big biotechs do and that's sort of like the hope for a lot of biotech investors right now that more consolidation will spur stock prices. do you think so? >> i think the comments and he's made comments over the last couple of days have caught the industry -- i think there's been debate over whether these guys have been true to looking in the mirror and what not. in fact, if you look at their performance over the last, you know, 12 to 18 months, and maybe because they have had more of a target on their back and these guys have slowed it down, and i think, you know, whether that's good or bad or whether they should, if you look at the entire sector there are companies -- i think people need to distinguish between the guys that are the poster guys and guys doing things and have pipelines and a lot of cash and valuations that are defensible and this company seems like it is. >> guy. >> 14 times forward earnings. remember, november last year when the pfizer/allergen deal merger was announced and that was sort of the pinnacle zenith and the same thing for the stock, and i think the stigma

attached to that deal going forward has reely hurt this name. if people wake up and look at the balance sheets to your point, valuation 14 times forward earnings, as i mentioned, this company makes a lot of sense, especially with the money they have to be able to utilize in the environment that we find ourselves in. >> so i would look at just the biotech etf which is ibb which is the nasdaq ibb, nasdaq index which tends to have the smaller names in it, the ones that may be part of the m & a and what concerns me is not only do we have the political season coming up but we're approaching around $300 and that's been major resistance. before i got involved in them i would rather fade at 300 than buy into this. >> speaking of biotech etfs, want to go to the options pit because one trader is betting on troubles ahead for the sector but specifically the xpi. dan, head over to the smart board. >> that's the s&p biotech etf which is not the one that's headquartered here. one that caught my eye today in the xpi, put volume was two

times that of calls which is not that unusual, especially given obviously the descent of this sector over the last year. it's really important to remember this the xpi is down about 30% from its all-time highs made in july of 2015, and while a lot of people have been trying to pick a bottom as the stock has been making a series of higher lows over the last three to five months or so, there was a trade today that caught my eye because it was a short-baited put spread that was purchased to open. today when the etf was trading 63.5, the buyer of 2,000 september quarterly, 1.25 for that, a max risk they can make to 3.75 between 611.25 and 57.50, and when you look at chart here, what's going on, this is like some really big support resistance line that's been in effect for the last year or so. the stock has just gotten above it. it's been consolidating above $60.

i think that's the level. possibly this trader is looking at either to play for a short-term breakdown or protection against the basket of biotech stocks and if it holds here, think about this. there's a really good setup from a technical basis and broken that downtrend and consolidated about it and if you're long biotech stocks, volatility, price of options cheap if you're looking ahead. >> check out the full show tomorrow at 5:30 p.m. eastern time on cnbc. coming up, gold to 1,500 bucks an ounce. that's what one strategist says the metal is heading by year end. what makes him so bullish. you're watching "fast money" on cnbc, first in business worldwide. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data

you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. remember here at ally, nothing stops us from doing right by our customers. who's with me? i'm in. i'm in. i'm in. i'm in. ♪ ♪ one, two, - wait, wait. wait - where's tina? doing the hand thing? yep! we are all in for our customers.

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[ clock titime. ] you only have so much. that's why we want to make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all we should fit into your life. not the other way around. welcome back to "fast mon " money." the move of the day, gold miners pulling back following the central bank's decision not to pull back. miners have been the major bright spots. gold tracking for its best year since 2010. the ceo of gold money, a gold-based savings and payment

network says gold is going to go even higher. roy, welcome to the show. >> thanks for having me. are you one of the gold bugs who says gold will go up no matter what? >> no, actually a portfolio manager doing value-oriented bottom up. trained to hate gold and really good at debating people why gold have no value and when the financial crisis of '08 hit i really recognized, you know, almost every asset has become financialized and seceded into security such that you need custodial requirements in order to own anything. the only way to remove liquidity from the system is by owning gold. learned a lot about gold and created a gold-backed financial network where you can save like a bank account or spend the gold or send the gold to other members. >> we want to get into that a little bit. why do you see gold going higher even in the face of rising rates here? >> well, we don't know they are rising yet, but i do think that it's important, you know, sometimes as traders and investors, we tend to overanalyze the next few weeks

and underanalyze the next few years, and, you know what i see, what is equivocal is a global financial bubble in fiat currencies and bubbles and this bubble has a lot of valves. doesn't just get pumped up by the fed. even if yellen raises rates by 25 beeps or so you still have kuroda and draghi and carney and still have china which in a way when it devalues exports its own deflation so i don't see how we can objectively analyze the situation today and say that we aren't going to have more money floating narnd one or two or three years. gold is simply the world's -- the rarest element in physics, not in economics, that's also immortal, and so when there's more money chasing everything, there's also more money chasing gold. the marginal cost rises and because gold is a stock commodity, not a flow commodity like oil or copper. the price that you see every day that's clearing is reflective of around $9 trillion of value. and so it's a real market price.

so under that scenario, it's quite asymmetric the way that i see it. we're going to be living through a rising gold price environment so long as real interest rates aren't brought back to at least where they were in 2010 or '11. >> so the knock on gold and i'm with you because i'm long gold and the knock on gold is if the dollar is rising, the correlation between dollar and gold, dollar is supposed to go down. what's your response to that? >> another misconception of gold that also confused me in the beginning. i think when you look at gold, have you to look at all the currencies. 196 global currencies, like asking someone what the weather is in new york state and then telling you, well, here's the weather in buffalo. have you to get the weather everywhere, and what we see, if you look at something like gold price and trade-weighted dollars, like the broad traded dollar, 10% of its all-time high. gold is at an all-time near high in the japanese yen and 10% off its high in euros so there has not been a peak-to-trough 28% decline in gold as we've seen in

usd in all the other currencies, and if you look at historical gold bull markets even in usd they generally last between four and ten years so it's been what, eight months now? i think it's very obvious that the path of least resistance is higher for gold, even in usd. >> roy, great to have you, we'll have you back. >> very interesting. >> what's your take, tim? >> the gold miners are massively underperformed in the last move. if you own, you know, an abx against a gold price here, that's actually a very interesting trade. totally underperformed and down 25% and gold is back at 1,350. >> every fiat currency has ended disastrous and you can make an argument that we've had more now than ever in the history of manned kind because of the action of central bafnlgts i'm wi with roy. can it go down? if the dollar rallies. $1,500 is where it starts to go

higher from, my opinion. >> can rally with the dollar, just so you know. it's not unusual for the gold and dollar to go together. since 1977, gold and the dollar have rallied together 28 times. that's about every year and a half. >> all right. coming up next, final trade. stay tuned.

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happy birthday, "star trek." 50 years ago that the iconic sci-fi show was introduced on scenes introducing captain kirk and dr. spock and one episode here and dear to our hearts, episode seven of season three. take a look at this. >> wait a minute. it's the ambassador kissing the girl with the green air. you have aged well, my friend. what are you, 102 now? >> chicks with green hair from other planets. >> you were saying chicks now. >> galaxies. >> time for the final trade. tim? >> this one is out of this world. occidental, oxi. >> b.k.? >> buy the financials, yield going higher.

>> dan? >> twitter, a little non-committal but you can sell out of the money put. >> guy? >> restoration hardware. >> i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 for more "fast." "mad money" starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you some money. call me at 1-800-743-cnbc or tweet me at @jimcramer. all right, i've seen people with a one-track mind, but whole markets? that's what we have now where the market can't seem to focus on more than one concept at